Inflation Dips to 11.25% in March

The Consumer Price Index (CPI), which measures inflation dropped to 11.25 per cent (year-on-year) in March 2019, compared to the 11.31 per cent recorded in February, the National Bureau of Statistics (NBS) disclosed yesterday.

It noted that the 0.06 per cent decrease in the headline index was reflected in all the divisions that determine inflation.

According to the March CPI report released yesterday, core inflation stood at 9.5 per cent, down by 0.3 per cent when compared with the 9.8 percent recorded in February.

The composite food index, stood at 13.45 per cent compared to 13.47 per cent the previous month.

According to the NBS, the urban inflation rate dropped to 11.54 per cent (year-on-year) in March, compared to 11.59 per cent in February, while the rural inflation rate also reduced to 10.99 per cent from 11.05 per cent.

On a month-on-month basis, the urban index rose by 0.81 percent in March, up by 0.05 from 0.76 per cent recorded in February while the rural index also rose by 0.77 per cent in March, up by 0.06 per cent from the 0.71 per cent rate recorded in February.

The statistical agency noted that the muted rise in the food index was caused by increases in prices of bread and cereals, meat, fish, potatoes, yam and other tubers, oils and fats, and soft drinks, vegetables, and fruits.

It stated: “On month-on-month basis, the food sub-index increased by 0.88 per cent in March 2019, up by 0.06 per cent points from 0.82 per cent recorded in February 2019.

“The average annual rate of change of the food sub-index for the twelve-month period ending March 2019 over the previous 12-month average was 13.42 per cent, 0.20 per cent points from the average annual rate of change recorded in February 2019 (13.62) per cent.”

However, on a month-on-month basis, the core sub-index increased by 0.53 per cent in March, down by 0.12 per cent when compared with 0.65 per cent recorded in February.

“The highest increases were recorded in prices of domestic and household services, tobacco, actual and imputed rent for housing, dental, medical and hospital services, tobacco and major household appliances,” it stated.

Commenting on the inflation numbers, Research Analysts at FXTM, Lukman Otunuga, said it was a favourable development, considering that there had been speculation of increased government spending stoking inflationary pressure.

“With consumer prices moderating closer towards the Central Bank of Nigeria’s target band of six-nine per cent, this may open the doors for the central bank to make a move in the future.

“While it remains premature to speculate on the possibility of another rate cut occurring anytime soon following the surprise move in March, repeated signs of easing inflationary pressures could prompt the CBN to cut rates again during the second half of 2019,” he added.

Also, analysts at Cordos Securities Limited, noted that looking ahead, whilst the still elevated diesel price should have ordinarily driven month-on-month food inflation higher in April, they expect a ramp up of output in April off season harvest by Nigerian farmers would cap higher transport cost pass-through to food prices.

“That, together with a stronger naira, which continues to discourage cross-border demand from neighbouring countries, informs our sanguine view on food prices. Thus, we expect month-on-month food inflation to moderate slightly in April.

“Elsewhere, despite the fuel scarcity which greeted the month of April across key segments of the federation, we remain largely confident of a subdued month-on-month core inflation reading in the near term,” they added.

The firm predicted that there was no risk to inflation throughout the rest of the year.

Nevertheless, analysts at Cowry Assets Management Limited stated: “We expect inflation rate to rise in the months of April, May and June amid Easter and Ramadan festivities plus ongoing planting season. Also, the eventual signing of the new minimum wage bill will also push headline inflation higher going forward.”

Meanwhile, the average price per litre paid by consumers for National Household Kerosene decreased by -0.49 per cent month-on-month and increased by 12.99 per cent year-on-year to N303.94 in March from N305.44 in February, the NBS said in a separate data released yesterday.

According to the National Household Kerosene Price Watch March 2018, which was posted on its website, states with the highest average price per litre of kerosene were Anambra N329.09, Ebonyi N326.83, and Ondo N326.67.

States with the lowest average price per litre of kerosene were Gombe N255.38, Niger N278.02 and Kaduna N279.75.

Also, average price per gallon paid by consumers for kerosene decreased by -1.56 per cent month-on-month and increased by 26.25 per cent year-on-year to N1190.89 in March 2019 from N1209.73 in February 2019.

The NBS further listed states with the highest average price per gallon of kerosene to include Borno N1357.14, Jigawa N1283.33 and Katsina N1278.13 while those with the lowest average price per gallon of kerosene were Bayelsa N1,022.37, Kogi (lN1,075.00 and Plateau N1,090.35.

Furthermore, the average price for the refilling of a 5kg cylinder for Liquefied Petroleum Gas (cooking gas) decreased by -0.16 per cent month-on-month and -1.25 per cent year-on-year to N2,064.45 in March from N2,067.68 in February.

According to the Liquefied Petroleum Gas (Cooking Gas) Price Watch, states with the highest average price for the refilling of a 5kg cylinder for cooking gas include Bauchi (N2,500.00), Cross River N2,400.00 and Adamawa N2,375.00 while those with the lowest average price for the refilling of a 5kg cylinder for cooking gas were Kaduna N1,740.17, Enugu N1,769.23 and Osun N1,785.29.

However, the average price for the refilling of a 12.5kg cylinder for cooking gas increased by 0.34 per cent month-on-month and 0.14 per cent year-on-year to N4,259.48 in March from N4,244.19 in February.

The states with the highest average price for the refilling of a 12.5kg cylinder were Cross River N4,753.57, Akwa Ibom N4,745.00 and Abia N4,688.89, the NBS stated.

States with the lowest average price for the refilling of a 12.5kg cylinder for cooking gas were Kano N3,787.50, Oyo N3,802.78 and Adamawa N3925.00.